Takeover speculation is swirling around several key British companies this weekend after millions of shares changed hands in a frenzy of buying late on Friday.

Shares in the London Stock Exchange rose by 5 per cent, reinforcing rumours that Deutsche Börse, London's trading rival in Frankfurt, could be about to pounce.

The German exchange attempted a merger with the LSE four years ago, but the move was kicked into touch by the organisation's big customers, who feared that LSE was prepared to cede too much control to Deutsche Börse, and that London could lose its status as Europe's pre-eminent financial centre.

LSE's share price has risen 25 per cent in two months, and the company may soon be forced to clarify its position to the Takeover Panel.

Elsewhere, US engineering giant UTC is understood to be considering raising its offer to acquire British fire protection group Kidde, where Sir Nigel Rudd is chairman.

The Americans have until the end of this week to 'put up or shut up' after a ruling by the authorities. UTC, headed by chief executive George David, has been stalking Kidde since last month, when it flagged a possible offer pitched at 160p a share, valuing Kidde at £1.3 billion. This week, it indicated it could offer 165p after it took soundings from Kidde's shareholders.

But some of Kidde's big investors are holding out for 170p a share. 'This one could go to the wire,' said one analyst. 'It is too close to call.'

Following the recent fall in the value of the dollar, Kidde could fetch £1.4bn.

UTC wants to reunite Kidde with Chubb, the security company it acquired for £622m last year. Both Chubb and Kidde were originally part of Williams Holdings until they were spun off separately four years ago.

Another mooted takeover target is Thus, the telecoms operator led by Bill Allen. Investors piled into the shares after Canada-based Columbia Venture Corporation increased its stake in Thus from 6.5 to 7.1 per cent.